Karnataka

Bidar

CC/24/2015

Md.Ishaq S/o Basiroddin. - Complainant(s)

Versus

HDFC Bank Ltd. - Opp.Party(s)

Sri. Deshpande.P.M.Adv.

05 Dec 2016

ORDER

::BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AT BIDAR::

 

 

                                                                                                       C.C.No. 24/2015

 

                                                                                     Date of filing : 12/03/2015

 

                                                                            Date of disposal : 05/12/ 2016

 

 

P R E S E N T:-                 (1) Shri. Jagannath Prasad Udgata,

                                                                                         B.A., LL.B

                                                                                                       President.

    

                                         (2) Shri. Shankrappa (Halipurgi),

                                                                      B.A.LL.B.

                                                                                  Member.

 

                                               

COMPLAINANT:-        Md. Ishaq, s/o Basiroddin,

                                         Age: 27 years,  Occ: Self employment,

                                          R/o Mailoor, Tq.Dist.Bidar-585401.

 

 

                                      (By Shri. Deshpande P.M., Advocate)

 

 

 

                                                      VERSUS

 

 

OPPONENT/S   :-         1.   HDFC Bank Ltd.,

                                               2-244, Main road, Opp:Public Garden,

                                                Gulbarga.

 

                                      2.    HDFC Bank Ltd.,

                                              Opp. Sapna International Hotel,

                                             Udgir road, Bidar-585401.

 

 

 

                                      ( O.P.No.1 By SBM Associates Advocates)

                                      (O.P.No.2-Exparte )

 

 

                                            ::   J UD G M E N T  : :

 

 

By Shri. Jagannath Prasad Udgata, President.

 

                This is a complaint filed by the above named complainant U/s   12 of Consumer Protection  Act, 1986 against the O.Ps. claiming compensation  and cost  due to deficiency of service on the part of the O.Ps.

 

2.         Brief facts of the case of the complaint are :

 

           Complainant is a native of Bidar, under self employment the complainant purchased a Excavator vehicle Hyundai HYD  Exc R-100-7 and he availed loan under HPA loan from the O.P.2. Bank for sum of             Rs. 27,00,000/-.  Thereafter the EMI fixed for sum of Rs. 80,500 p.m. from Feb-2014.  ( Sic-the loan commenced from January-2013).   Accordingly, the complainant paid Rs.13,50,000/-upto Nov-2014 to the O.P 2. Bank and the complainant is not a defaulter and has been paid regular payments.  On 11-11-2014 one Mr. Vijay Mania employee of the O.P.Bank came to the complainant and seized the vehicle by the help of stranger/henchmen.     The O.P.no.2 Bank has not issued any notice in respect of seizure of the vehicle hence, the O.P Bank unlawful seized the vehicle thereafter, the complainant has approached Sri. Vijay Mani of HDFC Hubli, who had  demanded stated to pay Rs. 8,00,000/- for releasing the vehicle.  Accordingly the complainant has paid Rs. 8,00,000/- to the HDFC Hubli, whereas no receipt was issued by the Bank hence, the total sum of Rs. 20,00,000/- paid to the O.P. Bank by the complainant.  Thereafter the O.P.Bank has issued a letter dt.22-11-2014, in that letter stated that the vehicle has been sold and again O.P. Bank demanded to pay Rs. 22,65070.78ps./- to the complainant.  The counsel for the complainant issued a notice to the O.P.Bank.  In reply to the notice the O.P. Bank again demanded the complainant to pay further sum of Rs.7,78,243-00. Therefore, the complainant is before this Forum.

 

3.              On receipt of the Court notice, O.P.no.2 has not appeared in this Forum and placed ex-parte.  The O.P. no.1 appeared before the Court through his counsel and filed his version and therein has been claimed that the complaint is not maintainable either on fact or on law and the complainant is not a Consumer as per the provisions of the C.P.Act., as the transaction between the complainant and O.P is that of a borrower and financier, the complaint does not come within the definition of Consumer as per section 2 (1)(d) of the Consumer Protection Act.1986.   The O.P. further claims that, the loan agreement contained an arbitration clause, the complainant is required to approach an arbitration tribunal and this Forum lacks jurisdiction to entertain this complaint.

 

4.            The O.P. Further avers that the O.P. had sanctioned financial assistance of Rs.27,00,000/- to the complainant to purchase a vehicle/ i.e. HYNDAI HYDRAULIC EXCAVATOR R-110-7 bearing its Engine no 4H27171220295, Chassis no.301D00765.  In turn, the complainant had executed loan cum hypothecation agreement bearing no.80474591 dt.04-01-2013.   As per the agreed terms of the loan agreement,  the complainant was required to repay the loan amount with applicable interest and other charges by way of equated monthly instalments of Rs. 80,500/- each in total 43 instalments.  The complainant had become chronic defaulter in repayment of the agreed instalments by violating the agreed terms of the loan agreement.  In view of default, the O.P.  had requested the complainant to make the required payment but, the complainant did not pay any heed to the request of the O.P.  Due to defaults, the O.P was compelled to issue a loan recall notice dt.05-11-2014 to the complainant demanding him to pay the entire outstanding amount as per the notice with default clause of repossession, sell and adjust the sale proceeds into the loan account of the complainant.  Despite service of the said notice the complainant did not come forward to pay the  required amount within the stipulated period mentioned in the notice.    

 

 

 

 

 

5.            Thereafter the O.P. left with no other alternative had repossessed the vehicle on 22-11-2014 with proper intimations dt.22-11-2014 to the Bidar Police Station and drawing an inventory of items in the vehicle on 22-11-2014 at 3.15 p.m. in B.HalliKhed.  After such repossession the O.P had issued a pre-sale notice dt.22-11-2014 to the complainant intimating him the aspect of repossession and demanding him to pay the total outstanding of Rs.22,65,070/- on or before 07-12-2014 so as to get the vehicle be released in his favour with default clause of selling the vehicle.  Despite of receipt of pre-sale notice dt.22-11-2014, the complainant failed to come forward to pay the entire outstanding so as to get the vehicle be released in his favour.  Hence the O.P. had sold the vehicle in an auction to one Mr. Santosh Bhimrao Patil of Toap, Hatakanagale Taluk, Kolhapur district for sum of   Rs. 15,00,000/- since he was the highest bidder for the vehicle amongst the participants and his bid was confirmed by the O.P and also the bid amount had tallied with the fair technical value of   Rs. 15,00,000/- as per the valuation report and adjusted the sale proceeds into the loan account of the complainant.  Still the complainant is due to pay an amount to the, tune of Rs. 7,78,243/- as damaged by the O.P.  Therefore, post-sale notice dt.05-01-2015 was issued to the complainant intimating him the sale proceedings and demanding him to pay the notice amount within seven days.  However, he never approached the O.P. to pay the said amount.  The O.P. had very well exhausted all the remedies available even before repossession and sale of the vehicle.  Therefore, no question of committing either deficiency of service or unfair trade practice arises on the part of the O.P. 

 

6.          It is further averred that the allegation regarding payment of Rs.8,00,000/- towards release of the vehicle in the hands of any officials of the Bank is hereby denied by the O.P. in toto.   The the same is falsely claimed without having any documentary evidence.  Hence, it was prayed that this  Forum may be pleased to dismiss the complaint with exemplary costs.

 

7.               The feuding parties have submitted documents as per the list at the end of this order, evidence affidavits, written arguments and were heard in length.  Both sides have submitted rulings of higher Foras in support of their respective contentions

 

 

8.           Taking into consideration  the rival contentions of the parties, the following points arise for our consideration:

 

1.  Does this Forum has the jurisdiction?

 

2.  Does the complainant prove that, there is any deficiency in service on the part of the O.P?
3. Does the O.P. prove that, it was justified in taking possession of the vehicle and sell it?

 

 

4. What order ?

 

 

 

9.  Our findings to the above points are as under:

       1.  In the affirmative.

       2.  In the affirmative.

       3.  In the negative.

       3.  As per the final order for the following:

 

                                            :: R E A S O N S :

10.              Albeit the O.P. has raised points disputing the status of the complainant as a Consumer and also the jurisdiction of this Forum to try this case in view of the arbitration clause contained in the loan agreement, we feel the same as a smoke screen created by the OP. To escape adjudication.  To drive in our points we hereby quote the definitions in the following sections of the C.P.Act.1986.

a) Section 2(1) (d) –                “Consumer”means anyu person who- Bus any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does ot include a person who obtains such goods for resale or for any commercial purpose ( hires or avails of) any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who ( hires or avails of) the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payments, when such services are availed of with the approval of the first mentioned person (but does not include a person who avails of such services for any commercial purpose) (Explainantion:  For the purpose of this clause, “commercial purpose does not include use by a person of goods bought and used by him and services availed by him exclusively for the purpose of earning his livelihood, by means of self-employment)   b)   Section 2(o)-                 “Service”means service of any description  which is made available to potential ( users and includes, but ot limited to, the provisions of facilities in connection with banking, financing, insurance, transport, processing supply of electrical or other energy, board or lodging or both, ( housing construction) entertainment, amusement or the purveying or news of other information, but does not include the rendering of any service free of charge or under a contract of personal service;   Section 3-   Act not in derogation of any other law The provisions of this Act. shall be in addition to and not in derogation of the provisions of any other law for the time being of force.

 

11.                Analysing the above provisions and gazing at the

Explanation Provided in section 2(1) (d) putting vis-a-vis the unchallenged claim of the complainant that he had acquired the Earth excavating machine to earn his livelihood, we rule that, he is a Consumer within the ambits of the C.P.Act, 1986.

 

12.               Further in section 2(o) the services of financing having been included, the O.Ps would not be permitted singing paens according to their whims and fancies.

 

13.               Coming down to consider the objections of the O.Ps regarding lack of jurisdiction of this Forum in view of the Arbitration clause in the loan agreement, we conclude that, the legislature mandating in section 3 that, the provisions of this Act. shall be in addition to and not in derogation of the provisions of any other law for the time being in force, we also conclude that, this Forum has the jurisdiction  to try this case and answer the preliminary point no.1 in the affirmative.

 

14.                 It is consideration of points no.2 & 3 has to be resorted simultaneously as both are inter webbed. 

 

                It is the case of the complainant that, he had acquired the equipment during February-2014 and upto November-2014 though he had remitted a sum of Rs. 13,50,000/- totally the O.P. Bank without any notice seized the vehicle on 11-11-2014.  The complainant further avers that, later he had paid a sum of Rs. 8,00,000/- to one Sri.Vijaya Mani, official of the O.P. Bank as per his demand but still the vehicle was not released to him and instead was sold in auction.  Primafacie, the complainant is trying to misguide this Court.  From the documents, the loan appears to be sanctioned on 04-01-2013 and the EMI payment intended to run from 05-02-2013 to 05-02-2016 (Ex.R.2).  A promissory note (Ex.R.3) also appears to have been executed by the complainant on 04-01-2013.  We find that, document produced by O.P. as Ex.R.2 is not at all stamped and the document Ex.R.3 is under stamped, also devoid of any consideration receipt.  The O.P. bank appears to have cheated the state exchequer it’s due and the matter has to be looked into by the Registrar of Stamps and Registrations.  However, the fact of the complainant’s commitment to pay E.M.I.s @ Rs. 80,500/- p.m. from 05-02-2013 to 05-02-2016 in last two pages of the loan agreement, which ipso facto means by 5-11-2014, he should have remitted 22 instalments amounting to Rs. 17,71,000/-.   From the money receipts submitted by the complainant it is seen that, for the first time he started repayment of Rs. 50,000/- and went on paying at varied rates, not in confirmity with the agreed terms and the last remittance was made by him on 6-08-2014 in a sum of Rs. 18,000/-.  He had altogether remitted a sum of Rs.11,75,000/- against  further outstanding of Rs.s5,96,000/- as on the date of seizure.  The non payment, irregular payment must have resulted levying penal interests and other dues, and hence it is no wonder that, the accumulated dues could have been inflated.  In toto, it can be inferred that, the complainant has defaulted in payment, whereby exercising the alleged rights under the agreement the O.P. Bank had seized the same.  The crux of the problem but lies elsewhere.  While, the complainant claims to have received no pre seizure notice the O.P. claims that, the same was issued on 05-11-2014 recalling the entire loan (Ex.R.4).  Surprisingly  but, the bank has not provided any postal receipt evidencing despatch of such notice or any postal acknowledgement to that effect.  We further see from Ex.R.5( two sheets) that, the Bank had despatched two letters to the Bidar P.S. under the caption “PRE REPOSSESSION”on 22-11-2014 at two different times None Knows, whether the police authorities received the letters or not before seizure of the equipment at 3.15 p.m. of 22-11-2014(Ex.R.6).  The chronicles but prove that, there was no notice fruitfully served on the borrower before the seizure and the same was sudden and impulsive disregarding appropriate business acumen.  Of course, we find no proof adduced by the complainant to have remitted a sum of Rs. 8,00,000/-to Sri.Vijaymani, officer of the O.P. and we discard that claim.  The documents referred to above have been created later by the Bank, to turn it’s unsavoury seizure sacrosanct. 

 

15.             Thereafter, delving further deep into the matter, we analyse documents marked as Ex.P.,1 Ex.P.2 synchronising with Ex.R.12 all dated January 05,2015.  The call of the  O.P. is to pay an extra amount of Rs. 7,78,243.33 within seven days after the excavator was sold against Rs.15,00,000/- to a bidder, we also see a letter of the O.P. to the complainant and his guarantor vide Ex.P.5 and P.6 synchronising with Ex.R.7, demanding a payment of Rs. 22,65,070.78 ps. to be paid by December 07,2014.  We wonder, was not this demand in humane, like in the play of “Merchant of Venice”by Shakespeare, in which the Lender Shylock was demanding a pound of flesh of Antonio, the borrower, should the repayment is defaulted.  Under the sun, which borrower can pay such a massive amount within a period of 15 days.  This proves, the lender Bank was determined to snatch out and usurp the equipment (vehicle) with utter disregard to the interest and entitlement of the Consumer.  We deprecate such action in the part of a progressive financier.  It’s action stinks of material gain by fair or foul means.

 

16.                Next coming to the notice of the O.P. Bank dt. Nov-22,2014,(Ex.R.7) put across, Ex.P.5 and P.6 demanding Rs. 22,65,070.78 ps. to be paid on or before December 07,2014 was an unusual high demand to be accomplished by a mortals and the Bank knows it pretty well.  We decline to put any credence to such a demand.

 

17.          The parties at dispute have quoted the following Judgments of higher Foras as described below:-

       Complainant

1. 2014 CPOR (NC Page 533

M/s L& T Finance Ltd V/s Chavan Sahu & ors.

Consumer Protection Act,1986-sections 15,17,19 and 21- Financial services-Vehicle finance-Repossession of vehicle-Just a few days before second instalment became due, vehicle was taken away from him- There was no authorisation to O.Ps to repossess vehicle as per terms and conditions governing grant of loan to him-This is case of deficiency in service and harassment of consumer at hands of O.Ps- No justification to interfere with well-reasoned orders passed by District Forum or State Commission by which they have ordered release of amount of Rs.3,43,000/- paid by complainant back to him along with 7% interest and a meagre sum of Rs.1000/- each as compensation-Revision petitions dismissed(Para 9 and d10)

 

2. 2015 (2) CpR 584 (N.C)

M/s Magma Fincorp Ltd. V/s Tikeswar Barik

Consumer Protection Act, 1986-sections 15,17,19 and 21-Financial services-Vehicle loan-Repossessionof vehicle for default in payment of instalments-Vehicle was neither surrendered by complainant to petitioner company nor was it repossessed with his consent-No order from a competent Court of law was obtained before repossession vehicle-Vehicle was in use and goods were loaded on it when it come to be seized by agency appointed by petitioner company for such purposes-Seizure of vehicle in such manner was absolutely illegal and unjustified-If vehicle is seized in such a manner, it is bound to cause tremendous harassment and mental agony to owner of vehicle besides damaging his reputation-Grant of appropriate compensation on account of such gross deficiency in service would be eminently justified –No material has been placed on record by petitioner company to show that sale was duly advertised in newspapers before vehicle was sold-Considering gross deficiency in services on part of petitioner company, award of compensation to extent of Rs.3,20,000/- cannot be said to be unjustified or unreasonable-No ground for interference with order of District Forum on merits is made out-Revision Petition dismissed.

 

 

       Opponents

 

1.  R.P. no. 914/2014 (N.C)

Canara Bank V/s R.S. Vasan (D.D.03-09-2014)

 

2. R.P.no.3882/2011

Shriram Transport Finance Co.Ltd. V/s S.Mahadevaih

(dt.8-10-2012)

 

3. S.A. No. 5268/2013, (Dt.22-03-2012

Mahadevaih V/s Shriram Transport Finance Co.Ltd.

 

4. R.P.No. 4260/2010- ( Dt. 01-08-2012)

M/s JCB India Ltd. V/s Mr.Mallappa Sangappa Mantri & Anr.

 

5. III  (2012 CPJ.4 (S.C.)  (D.D. 21-02-2012)

Suryapal Singh V/s Siddha Vinayak Motors & anr.

 

 

 18.            Undoubtedly, the higher Foras had held divergent views on similar aspect but the latest view of National Commission in 2015(2), CPR-584- M/s Magma finance Corporation. Ltd. V/s Tikeswar Barik would rule the roost and we hold that, the seizure of the excavator was primafacie in illegal manner and hence we pass the following:

 

: :   ORDER : :

 

              For the reasons discussed above, the complaint filed by the complainant U/s. 12 of the Consumer Protection Act 1986 is hereby allowed partly with costs against O.P.

 

1. The O.P.s would be precluded to collect any amount from the complainant.
2. The Opponent would be liable jointly and severally to pay a sum of Rs. 3,00,000/-to the complainant as compensation due to the illegal seizure and consequential sell in public auction.
3. The O.Ps to pay a sum of Rs.10,000/- as litigation expenses.
4. Should the O.Ps fail to pay the compensation in due time, they would be liable to pay interest @ 12% p.a. from the date of this order till date of realisation

 

5. Four weeks time granted to comply this order.

              

 

   ( Typed to our dictation then corrected, signed by us and then pronounced in the open Forum on this 5^th  day of December-2016 )

 

 

 

                   Sd/-                                                                        Sd/-

   Sri. Shankrappa H.                                             Sri. Jagannath Prasad                                   

             Member.                                                                President.

Documents relied upon by the complainant.

 

1. Ex.P.1- HDFC Bank Deposit Slip (Total 24)
2. Ex.R.2- Original Photoes ( Total 2)

 

Documents relied upon by the Opponent.

 

1.  Ex.R.1- Copy of loan application.
2. Ex.R.2- Copy of loan agreement.
3. Ex.R.3- Copy of Demand Promissory Note.
4. Ex.R.4-Copy of loan recall notice dt.05-112014.
5. Ex.R.5- Copy of the pre- post repossession intimation to the Bidar Police dt.22-11-2014.
6. Ex.R.6-Copy of the inventory of items in vehicle dt.22-11-2014.
7. Ex.R.7-Copy of the pre-sale notices dt.22-11-2014 with foreclosure statement.
8. Ex.R.8-Copy of the valuation report dt.23-11-2014 with photographs  (xerox )of the vehicle.
9. Ex.R.9- Copy of the quotation dt.31-12-2014.
10. Ex.R.10- Copy of the deed of indemnity dt.03-01-2015.
11. Ex.R.11-Copy of the release letter dt.03-01-2015.
12. Ex.R.12- Copy of the post-sale notices dt.05-01-2015.

 

           Sd/-                                                                                   Sd/-

   Sri. Shankrappa H.                                             Sri. Jagannath Prasad                                  

        Member.                                                                President.